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Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Thursday, January 24, 2013

Forbes: As IRS Tax Filing Season Begins, There's Bad News For Honest Taxpayers

1040Forbes:  As IRS Tax Filing Season Begins, There's Bad News For Honest Taxpayers, by Janet Novack:

With this year’s tax filing season set to begin in a week, there are ominous signs for honest folks who want to complete their 1040s and pay what they owe (not more or less) with a minimum of hassle.

Customer service at the IRS is dismal and deteriorating. ... The epidemic of identity theft refund fraud hasn’t yet been contained. Hope for a major reform that might simplify the tax code is waning. And last Friday a federal judge issued a permanent injunction blocking an IRS plan to regulate and enforce some minimum competency and continuing education requirements on hundreds of thousands of currently unregulated paid tax preparers.

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“If the injunction stands, the taxpayers of the United States will be grievously harmed,” IRS National Taxpayer Advocate Nina E. Olson told Forbes.

What a bunch of bull. It's all about government control...and, its backroom deals with mass tax preparers like H&R Block to limit competition.

If the IRS cared about consumers, it would be wanting to expand the market to bring down preparation fees...or, work with Congress to make taxes less complicated so that more people could prepare their own returns. It would be dealing only with bad preparers rather than throwing all preparers under one size-fits-all blanket of control.

The IRS initially fought hard to have CPAs and attorneys under the same preparer regulations, despite the requirements in those fields for continuing education, so it's not about competency. Still, the IRS added annual fees to professionals that do nothing but enrich the Service and hack off people like me.

What's ironic is that a terribly incompetent divison of the government (well, aren't they all) wants to regulate and wear down another industry that is more qualified than itself and which has been helping the Service to collect the right amount of money for decades. If Nina Olson is so worried about taxpayers, she should do more about the bad information and service that is delivered by the IRS and the needless paperwork that taxpayers are forced to handle from it.

Now, ask me how I feel about registering all gun owners.

Posted by: Woody | Jan 24, 2013 7:16:25 AM

Where to begin with this nonsense?

First, there is no way to calculate how many people don't get through to IRS by phone. Phone registers don't count busy signals, or dropped calls by discrete number. It's all a guess.

And of course people who work for the Commissioner, even though they like to think they are "independent," favor the Commissioner's regulatory plans. In the real world, when tax return preparers are regulated, only unregulated tax preparers will assist with preparation of fraudulent returns. Before imposing sanctions on half a million honest people because five or ten thousand are dishonest, why not enforce the laws already on the books?

Posted by: Bob | Jan 24, 2013 9:42:27 AM

Woody: No doubt the IRS has many faults. Often we're lucky to get the doors open in the morning. However I've seen no evidence that it wants more complicated tax laws. Let's blame the President and Congress for laws they've foisted on us.

Posted by: Elmer Stoup | Jan 25, 2013 6:33:48 AM

Elmer, sometimes (actually, quite often) I go on a rant about something that hits me wrong at the moment. I agree that the IRS doesn't want more complicated tax laws. I wanted to suggest that the IRS doesn't seem to have any visible impact in trying to simplify them. But, I'm not blaming them.

In one respect, I also can't blame Congress, because, while people are generally frustrated with the entity, they seem to like their own representatives. (Me...I like gridlock, as the less done the better.) I can't blame the President necessarily, either, as unqualifed as he is. Let's get to the root and blame the voters and lobbyists. People get the laws and leaders that they deserve.

With all due respect, I should give the IRS some credit and thanks for what it does to help and to get the doors open each morning.

Posted by: Woody | Jan 25, 2013 8:03:57 AM